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UK fintech firms raised $7.2 billion in the first half of 2025, down 5% from the same period last year, as blockbuster early-year transactions gave way to a quieter second quarter, according to KPMG’s latest Pulse of Fintech report.
There were 216 merger, acquisition and funding deals in the first six months, up from 198 a year ago. But nearly three-quarters of the capital arrived in Q1, which delivered $5.2 billion across 125 deals, compared with just $2 billion across 91 deals in Q2.
The early surge was powered by a handful of outsized transactions: BlackRock’s $3.1 billion buyout of private-markets data group Preqin, Rapyd’s $500 million VC round to support its acquisition of PayU’s non-India operations, and FNZ’s $500 million raise to expand its wealth and asset management platform.
The UK retained its position as Europe’s fintech capital, attracting more funding than the rest of EMEA combined. But the pace is still well below the 2021 peak, when record-low interest rates and frothy valuations pushed investment to unprecedented highs.
“Although UK fintech investment experienced a slight decline in the first half of the year compared to 2024, it is encouraging to observe the continued resilience of the UK fintech sector despite the challenging macroeconomic environment,” said Hannah Dobson, partner and UK head of fintech at KPMG.
Dobson pointed to policy developments as a potential tailwind for the sector, including the Financial Conduct Authority’s new partnership with Nvidia. The initiative will open an AI-focused “sandbox” later this year, giving banks and fintechs access to advanced computing tools for testing and research before launching new services.
For now, dealmakers say the market remains selective, with strategic acquisitions and large late-stage rounds still getting done, while earlier-stage funding faces tighter scrutiny. Whether the second half brings a broader rebound will depend on the path of interest rates — and investors’ appetite for risk.
That said, the UK’s financial regulator introduced a series of changes to make it easier and cheaper for Fintechs to raise capital, in a move it says will boost growth and widen access to investment opportunities.
Under the new rules, listed firms will no longer need to publish full prospectuses when issuing additional shares in most cases. The Financial Conduct Authority (FCA) also said the time between publishing a prospectus and launching an initial public offering (IPO) will be cut in half, allowing firms to list faster.
The updated framework is part of a wider push to keep London’s capital markets competitive, especially for smaller and growing companies.
Easier Access to Capital
One of the headline changes is raising the threshold at which a full prospectus is required for secondary share issues — from 20% to 75% of a company’s existing share capital. The FCA estimates this could save UK firms around £40 million per year in regulatory costs.
For IPOs that involve the public, the required waiting period after prospectus publication has been trimmed from six days to three.
The FCA also announced a single disclosure standard for corporate bonds, covering both large and small issues. The goal is to make it easier for companies to issue bonds in smaller, more manageable sizes that are more accessible for retail investors.
Earlier in May, the UK Treasury met with the heads of some of the country’s most valuable fintech firms, including Monzo and Revolut, as part of a renewed push to encourage high-profile listings on the London Stock Exchange.
Economic Secretary Emma Reynolds hosted executives from Monzo, Revolut, Clearscore, and OakNorth, alongside London Stock Exchange CEO Dame Julia Hoggett and FCA’s Simon Walls.
The Treasury’s outreach comes amid growing concern over the health of London’s public markets. According to LSE data, 88 companies either delisted or moved their primary listings away from the exchange last year, including names like Flutter and Darktrace. Just 18 firms joined the main market in the same period.
Officials hope that landing a major fintech IPO could help reverse that trend and send a message that London remains a viable home for fast-growing tech firms.
